Treasury told to get a grip after £11bn in unpaid tax written off by mistake

Almost Â£11billion in unpaid tax was written off in a year without anyone realising as chaos reigned among those supposedly in control of the nationâs finances, MPs say.

The Treasury ‘must get a grip’ on its accounts

The lost money, owed by small businesses and because of errors in calculating tax credits, went unnoticed by the Treasury.

It also âdid not have a gripâ on the fact that the country has racked up a potential bill of more than Â£15billion for medical negligence cases. It was barely aware that the cost of nuclear decommissioning had soared past Â£56billion and potential cost of public sector pensions had boomed by Â£300billion to £1,132 billion.

Even the accounts which were supposed to highlight the problems were incomplete and out of date.

Margaret Hodge , chairwoman of the Commons public accounts committee, said the sums involved were staggering. She added: âThe Treasury has departed from accounting standards by leaving out of the accounts such bodies as Network Rail and the publicly owned banks.â

The damning picture emerged in November when the first set of whole government accounts was published to examine risks to the countryâs financial health.

It also showed that £131.5billion was committed to public finance initiatives, which would create assets worth just a quarter of that.

The treasuryÂ admitted it was âsurprisedâ about the tax write-offs which, along with Â£105billion of uncollected tax, was called a âgobsmackingly, huge, ginormous figureâ.

In total, the country has liabilities of more than £1.2trillion. But the MPs said the accounts took 20 months to compile, when other countries produce them in seven.

Campaign group the TaxPayersâ Alliance said: âTaxpayers will be shocked at some of the items in these new accounts.â

However, the treasury said: âThis is the most ambitious public sector account prepared anywhere in the world.â